Maharashtra State BoardHSC Arts 12th Board Exam

Following is the Balance Sheet of the Firm of Sonu , Monu and Piyu Who Share Profits and Losses in the Ratio of Their Capital : - Book Keeping and Accountancy

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Ledger

Following is the balance sheet of the firm of Sonu , Monu and Piyu who share profits and losses in the ratio of their capital :

Balance sheet as on 31st March, 2013

Liabilities Amount (₹) Assets Amount
(₹)
Capital A/c   Plant and Machinery 20000
Sonu 50000 Land and Building 55000
Monu 20000 Stock 12000
Piyu 30000 Debtors 12000 11000
Creditors 15000 Less : R.D.D (1000)
    Cash 17000
  115000   115000

Piyu retires from the business on 31st March 2013 and the following adjustments were agreed : 

(1) The stock is to be valued at 92% of its book value.

(2) R.D.D. is to be maintained at 10 % on debtors.

(3) The value of land and buildings is to be appreciated by 20 %.

(4) The goodwill of the firm to be fixed at ₹ 12000. Piyu share in the same be adjusted in the account of accounting partners in gain ratio.

(5) The entire capital of the new firm be fixed at ₹ 160000 between Sonu and Monu in their new profit sharing ratio which is fixed at 3 : 1 by making adjustment for difference in cash and amount payable to piyu paid in cash.

Prepare : Profit and loss adjustment account , Partners' capital account and balance sheet after retirement of piyu.

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Solution

In the  books of Sonu, Monu and Piyu

Profit and Adjustment A/c

Particulars
Amount
Amount
Particulars
Amount
Amount
To Stock A/c
 
960
By Land and Building A/c
 
11000
To R.D.D. A/c
 
200
     
To Profit on Revaluation Transferred to partners Capital A/c
   
Sonu Capital A/c
4920
9840
Monu Capital A/c
1968
Piyu Capital A/c
2952
 
11000
 
11000


Partners’ Capital A/c

Particulars
Sonu
Monu
Piyu
Particulars
Sonu
Monu
Piyu
To Goodwill A/c (5:1)
3000
600
-
By Balance b/d
50000
20000
30000
To Cash A/c
   
36552
By Profit and Loss Adjustment A/c [Profit on Revaluation]
4920
1968
2952
       
By Goodwill A/c
   
3600
To Balance C/d 120000 40000  
By Cash A/c
68080
18632
-
 
123000
40600
36552
 
123000
40600
36552


In the books of M/s Sonu and Monu.

Balance Sheet as on 1st April, 2013.

Liabilities
Amount
Amount
Assets
Amount
Amount
Creditors
 
15000
Plant and Machinery
 
20000
Capital A/c
   
Land and Building
55000
 
Sonu
120000
 
Add: Appreciation
11000
66000
Monu
40000
160000
Stock
12000
 
     
Less: Written off
960
11040
Debtors
12000
 
Less: R.D.D.
1200
10800
Cash
 
67160
 
175000
 
175000
Concept: Retirement Or Death of a Partner - Adjustment of Accumulated Profits and Losses
  Is there an error in this question or solution?

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